PM in crushing defeat over asylum seekers bill

UPDATE: Scott Morrison has suffered a historic defeat over medical transfers for asylum seekers - despite 11th hour legal advice that it could be "unconstitutional".

It makes the Morrison Government the first to lose a vote on a substantive piece of legislation in the lower house since 1929.

Labor and crossbench MPs voted to pass the legislation just before 6.15pm AEDT.

All amendments passed 75 votes to 74.

Constitutional law expert Anne Twomey told News Corp the government would be under pressure to resign or hold an election if it lost the vote after it warned the bill could be "unconstitutional".

It comes after Solicitor-General Stephen Donaghue provided confidential advice to the government that the bill would be "unconstitutional" because it has been amended in the Senate to involve expenditure for a new independent medical panel to oversee refugee transfers.

"Money bills" must come from the House of Representatives, not the Senate.

Professor Twomey said it was a "high-risk manoeuvre" to have declared the bill a "money bill".

"If the bill is regarded as a money-bill, and is passed against the government's wishes, then that is a very serious matter, because it would indicate that the government had lost control of the finances of the country, which is usually an indication that it must resign or hold an election," the University of Sydney expert said.

"For example, the Fadden Government resigned when its budget was reduced by the nominal sum of 1 pound. Hence, it is a high-risk manoeuvre."

Professor Twomey said the law would not be open to a High Court challenge.

"The High Court held in the Wilkie case regarding the postal survey on same-sex marriage that s 53 of the Constitution is not-justiciable, meaning that the courts will not enforce it and will not strike down a law on the basis that it breaches s 53.

"The High Court takes the view that it is up to the Houses to decide."

But Labor says any constitutional issues have been removed by making simple changes to the amendments, such as removing remuneration for the medical panel.

EARLIER: SCOTT Morrison is edging closer to a historic defeat on the floor of parliament today with a key crossbencher saying she is open to Labor's changes to a bill on medical transfers for asylum seekers.

In a mammoth first week back in Canberra which begins today, the Prime Minister faces another potentially humiliating vote on a push to add extra dates to parliament's sitting calendar to deal with banking royal commission recommendations.

Furious negotiation is underway this morning in parliament as the Coalition and Labor both try to win crossbench support before a vote on the medical evacuations bill occurs this afternoon.

If it succeeds, Mr Morrison's government will be the first to have lost a vote on a substantive piece of legislation in the lower house since 1929.

"The bill is absolutely acceptable in no form and only weakens our borders," Mr Morrison told reporters in Canberra this morning as politicians attended a church service before parliament resumes.

The prime minister was also adamant he would not be calling an election immediately if the government lost the vote today.

He is edging closer to defeat on the bill however after independent MP Kerryn Phelps indicated this morning she was open to Labor's three amendments.

"I'm certainly not hostile to some of those concepts," Dr Phelps told Sky News.

"There's no question that the Australian people are demanding action on this cohort of people who are trapped indefinitely on Manus Island and Nauru. It's inhumane and cruel and we have to find a solution," she said.

"We thought we had a best practice solution with the legislation that passed the Senate in December last year. If there are some small tweaks that need to be done to make it acceptable to the majority of parliamentarians in the house of representatives, that is what we want to achieve today."

Mr Morrison is edging closer to defeat on the bill however after independent MP Kerryn Phelps indicated this morning she was open to Labor’s three amendments. Picture: Kym Smith

The crossbench MP said she would consider Labor's proposals carefully after speaking to refugee advocates, lawyers, and other crossbenchers.

Labor backed away from its initial strong support of the current bill after Opposition leader Bill Shorten received a security briefing on it yesterday.

Opposition MPs signed off three amendments they want to make in an urgent meeting last night.

One of Labor's amendments would limit the medical transfer bill to existing refugees on Manus Island and Nauru in a bid to blunt the government's claim that the bill could restart the people smuggling trade.

Another would give the Home Affairs Minister more time to consider the recommendations of a medical panel on each transfer, extending it from the current 24 hours.

A third change would allow the Minister to reject a transfer on character grounds, after concerns were raised the current definition of security could allow paedophiles, rapists and other criminals into the country.

Labor backed away from its initial strong support of the current bill after Opposition leader Bill Shorten received a security briefing on it yesterday. Picture: AAP/Dan Himbrechts

Defending the backdown this morning, Mr Shorten said: "I think the current government confuses stubbornness with strength ... What we want to do is make sure that whilst we maintain strong borders, we treat refugees humanely and provide the appropriate medical care for people who require it."

He said Labor had listened to the advice of security agencies and, as a result, wanted to "strengthen" the current medical evacuation bill in three ways.

"First, to broaden the definition of security in relation to ministerial discretion," he said.

"Secondly, to make the time frames more workable and appropriate.

"And thirdly, to limit the application of the Bill to those people on Manus and Nauru currently - just as the current Government has done in relation to the US refugee resettlement arrangement - to make sure, that however small, the marketing opportunities are not there for people smugglers to re-open their vile trade and to make sure that people who are vulnerable don't put their lives at risk on the high sea."

Labor needs to convince all the crossbenchers to support the amendements to the bill. Picture: Gary Ramage

Mr Neumann said the party had been "happy" with its discussions with the crossbench so far.

"We are pleased that we're working constructively in relation to these matters and we'll have further discussions today," he said.

The vote is expected to occur this afternoon when the medical evacuations bill goes back to the House as a "message from the Senate".

It's likely to be debated after Question Time.

Labor doesn't need an absolute majority to win the vote, it only needs 75 MPs.

The opposition needs to convince Greens MP Adam Bandt and independents Julia Banks, Cathy McGowan, Andrew Wilkie and Rebekha Sharkie, as well as Dr Phelps, to have the numbers.

The bill will then need to go back to the Senate where the extra changes will be debated.